Jan 9, 2009

Business - India;Other bidders for Hyderabad Metro may not be considered

The Andhra Pradesh government will have to forego Rs 30,311 crore over a period of 34 years if its contract with the Maytas Infra-led consortium for executing the Rs 12,000-crore Hyderabad Metro Rail Project falls through in the light of the ongoing Satyam crisis. Discounted (at 13.5 per cent a year) to get its present value, the money is worth Rs 1,240 crore today.

Maytas Infra opened up a new way of funding the build-operate-transfer (BOT) project by offering to pay the government and refusing to take the Rs 4,800 crore available under the viability gap funding from the state and central governments.

The next best bidder for the 71-km project was a consortium led by Malaysia’s Magna Allmore, Siemens, Emirate Trading Agency and Nagarjuna Constructions, which also refused VGF and offered to pay the state government's equity component of Rs 250 crore. Two other bidders — Essar and Reliance-led consortia — sought a grant of Rs 3,100 crore and Rs 2,811 crore, respectively.

Following the latest developments at Satyam, the state government is reviewing the concessionaire agreement with the Maytas-led consortium.

Will the next best bidder be considered if the Maytas consortium falls through? Though all these aspects are yet to be considered, sources said the next best bidder may not be considered. Instead, fresh bids may be called for, which could lead to delay in the execution of the project.

The Maytas-led consortium comprising Nava Bharat Ventures, Italian-Thai Development Plc and IL&FS has committed to contribute to the state government Rs 11 crore on agreement, Rs 50 crore on financial closure, Rs 200 crore in the fourth year, Rs 100 crore each in the seventh, eighth and ninth years, and Rs 1,750 crore a year from the 18th to 34th year. The consortium, which paid Rs 11 crore as initial amount and a Rs 60 crore bank guarantee, is slated to achieve financial closure by March 2009.

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